Don't Forget the Nanny Overtime

Most nannies and their employers work and are paid on a set weekly schedule; however, from time to time the family will require additional hours from their nanny. Legally, nannies are entitled to additional compensation for additional hours worked, and live out nannies, at a minimum, are entitled to the overtime differential (1.5 times the hourly rate) for hours worked over 40 in a work week. *

In New York, Domestic Workers United (an in-home caregivers advocacy group) recently established a help line for nannies, housekeepers, and their employers to explain New York's labor laws surrounding overtime for household employees. In California, affiliated worker advocacy groups have been actively organizing and educating their constituencies about California labor laws for in-home caregivers.

Many employers, accustomed to being exempt, salaried workers professionally, neglect to pay their nanny or housekeeper accrued overtime. This is a risky proposition for the family. The convergence of Federal and State wage and hour enforcement efforts (an Obama administration priority), and the well organized educational outreach efforts of DWU and it's affiliates, raise the risk to the household employer that a disgruntled employee will file a Wage and Hour grievance. The consequences include awards of back pay, penalties, interest and attorney's fees.

Families are advised to side step these risks and follow best practices that include:

Have a written compensation agreement with their household employees that includes wages stated in hourly rate terms.

Maintain accurate and contemporaneous time tracking records.

Track and include overtime hours in the periodic payroll.

Provide the employee with documentation of the periodic payroll calculation, including weekly hours worked, hours paid at the regular rate, hours paid at the overtime rate as well as applicable tax deductions. This is legally required in some circumstances!

HWS clients who have any questions about their employee's payroll and time tracking are invited to call their representative to discuss their specific circumstances and best practices.

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About Us

HomeWork Solutions specializes in providing household employers and their tax preparers real solutions for nanny tax compliance. We are nationally recognized experts in the field of household employment taxes, regularly consulted by media such as the New York Times and Wall Street Journal.